Permission to appeal after debarment

Permission to appeal after debarment

Can a defendant who had been conclusively debarred from defending a claim be granted permission to appeal against the substantive judgment of the claim? Nathan Capone, associate at Fieldfisher, looks at how the Chancery Division dealt with that issue in Hall v Elia.

Original news

Hall and another v Elia and another [2016] EWHC 1697 (Ch), [2016] All ER (D) 63 (Jul)

The Chancery Division refused an application by a mother for permission to appeal against a registrar’s decision that a deed by which her son had purported to assign his interest in a property to her was a sham or, in the alternative, should be set aside pursuant to sections 339, 340 or 423 of the Insolvency Act 1986 (IA 1986). The Chancery Division judge found that as the mother had been debarred by the registrar from defending the claim, she should be refused permission to appeal against his decision on the deed of assignment.

What was the background to the appeal?

The son and mother maintained that by a deed of assignment he had sold his interest in the property to her before the bankruptcy order was made against him. His trustee in bankruptcy claimed a beneficial interest in the property, as did the liquidators of his company on the basis that company monies had been used to fund the purchase of the property.

The trustee and liquidators applied to the Bankruptcy Court for the deed of assignment to be set aside. The registrar held that the assignment was

  • a sham transaction
  • a transaction at an undervalue pursuant to IA 1986, s 339
  • a voidable preference pursuant to IA 1986, s 340, and
  • a transaction defrauding creditors pursuant to IA 1986, s 423

Prior to the hearing, the registrar had debarred the mother from defending the application and adducing evidence owing to her failure to comply with his previous orders.

The mother’s application for permission to appeal against the debarring order was refused by the Chancery Division.

Despite being conclusively debarred from defending the claim and adducing evidence, the mother nevertheless applied for permission to appeal against the registrar’s substantive judgment.

What were the legal issues the judge had to decide?

The judge was required to determine whether a defendant who is debarred from defending a claim and adducing evidence may neverthele

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